Money laundering
Today its definition is often expanded by government and international regulators such as the US Office of the Comptroller of the Currency to mean "any financial transaction which generates an asset or a value as the result of an illegal act," which may involve actions such as tax evasion or false accounting.
Courts involve money laundering committed by private individuals, drug dealers, businesses, corrupt officials, members of criminal organizations such as the Mafia, and even states.
The act is defined as "the process by which the proceeds of crime are converted into assets which appear to have a legitimate origin, so that they can be retained permanently or recycled into further criminal enterprises".
[2] Organized crime received a major boost from Prohibition and a large source of new funds that were obtained from illegal sales of alcohol.
However, this process has been abused by some law enforcement agencies to take and keep money without strong evidence of related criminal activity, to be used to supplement their own budgets.
Solutions such as ZCash and Monero ― known as privacy coins[41] ― are examples of cryptocurrencies that provide unlinkable anonymity via proofs and/or obfuscation of information (ring signatures).
[44] NFTs are often used to perform Wash Trading by creating several different wallets for one individual, generating several fictitious sales and consequently selling the respective NFT to a third party.
[45] According to a report by Chainalysis, these types of wash trades are becoming increasingly popular among money launderers especially due to the largely anonymous nature of transactions on NFT marketplaces.
[49] A mixer blends the cryptocurrencies of many users together to obfuscate the origins and owners of funds, enabling a greater degree of privacy on public blockchains like Bitcoin and Ethereum.
[51] The use of the mixer Tornado Cash in the laundering of funds by the Lazarus Group led the Office of Foreign Assets Control to sanction it, prompting some users to sue the Treasury Department.
[53] In 2013, Jean-Loup Richet, a research fellow at ESSEC ISIS, surveyed new techniques that cybercriminals were using in a report written for the United Nations Office on Drugs and Crime.
[39] To avoid the usage of decentralized digital money such as Bitcoin for the profit of crime and corruption, Australia is planning to strengthen the nation's anti-money laundering laws.
[56] The characteristics of Bitcoin—it is completely deterministic, protocol-based and can be difficult to censor[citation needed]—make it possible to circumvent national laws using services like Tor to obfuscate transaction origins.
There are several cases in which criminals have cashed out a significant amount of Bitcoin after ransomware attacks, drug dealings, cyber fraud and gunrunning.
[60] It is usually perpetrated for the purpose of financing terrorism[61] but can be also used by criminal organizations that have invested in legal businesses and would like to withdraw legitimate funds from official circulation.
[62] For example, in an affidavit filed on 24 March 2014 in United States District Court, Northern California, San Francisco Division, FBI special agent Emmanuel V. Pascua alleged that several people associated with the Chee Kung Tong organization, and California State Senator Leland Yee, engaged in reverse money laundering activities.
[18] Various estimates of the scale of global money laundering are sometimes repeated often enough to make some people regard them as factual—but no researcher has overcome the inherent difficulty of measuring an actively concealed practice.
Regardless of the difficulty in measurement, the amount of money laundered each year is in the billions of US dollars and poses a significant policy concern for governments.
[69][70] Below table shows the annual reported money laundering cases per 100,000 population for individual countries for the last available year according to the United Nations Office on Drugs and Crime.
